~ Fragments of Expatriate Life

I’m Rich! Illusions of China from the BBC

There’s a rather nifty little tool that’s been launched on the BBC’s website today, and you can find out how your earnings compare to other people in the country you’re in and to the rest of the world in general. You’ll find the calculator here.

While the BBC's tool is not particularly accurate it does have the advantage of being easier to use than a traditional Chinese calculator. Though I'm told that you can use an abacus for faster (small) calculations than an electronic calculator.

Sadly it appears that someone in the BBC has decided that the RMB has appreciated rather more against the dollar than it actually has. When I entered my average monthly earnings in RMB (there’s no facility for dollars which are what I actually get paid in) – the site announced that I made nearly twice as much as I do.

That’s right through no extra effort of my own the BBC has made me rich beyond my wildest dreams. That’s rather lovely, even if it’s only an illusion that is callously dashed at the ATM.

However, ignoring this little teething problem this does rather illustrate one of the points I was trying to make in some of the China’s Economy Theme. Whilst as you can see Chinese workers do make more than people in India and Mexico, they are behind such stalwarts of economic power like Kazakhstan and Belarus. Overcoming this is one of the key challenges to China as it becomes a truly global power.

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2 thoughts on “I’m Rich! Illusions of China from the BBC”

The BBC calculator translates local currency income into US$ using purchasing power parity (PPP), not current exchange rates. It significantly increases Chinese incomes compared to current exchange rates because its considered cheaper to live in China than in the US.

But what it doesn’t deal with is the fact that its a lot more expensive to live in Shanghai or Shenzhen than it is in a small inland city. The same applies in most countries. An income that provides a good standard of living in Milwaukee or Middlesbrough doesn’t look so hot if you live in Manhattan or Marylebone.

These comparisons are also less useful for expats as their cost of living is likely to be higher than for locals, even if only because they are likely to consume products that are unusual in the local marketplace and therefore more expensive. Although even then there are distortions. My cost of living in Anhui compared to locals earning similar incomes was increased by the cost of imported goods that I considered necessities (or little luxuries to help cope with life in Anhui), but then I didn’t have the costs associated with societal pressure for status symbols. I could collect my daughter from kindergarten on my bicycle without losing face – I didn’t need to do it in a BMW or a Benz (or perhaps I did lose face, but just didn’t care). I didn’t need to demonstrate that I did my shopping in Nanjing Xi Lu either.

I completely agree. I don’t think people have figured out how expensive China can be – Shenzhen costs me more to live in on a month than it did to live in Dubai or Saudi Arabia. And I don’t drive or have a bicycle – I use the metro to get everywhere…